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From course:

Management accounting 2022

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Question:

What is customer profitability analys?

Author: Hjalmer Pedersen


Answer:

We analyze the profitability of each customer to see what customers to focus on. We do this by ranking each customer, depending on profit or revenue. This can answer the following questions: 1. How many profitable/unprofitable customers do we have? 2. Who are our most valuable customers? 3. What is the magnitude of losses of unprofitable customers? 4. How diverse are customers with respect to their profit contribution?


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We analyze the profitability of each customer to see what customers to focus on. We do this by ranking each customer, depending on profit or revenue. This can answer the following questions: 1. How many profitable/unprofitable customers do we have? 2. Who are our most valuable customers? 3. What is the magnitude of losses of unprofitable customers? 4. How diverse are customers with respect to their profit contribution?
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Author

Hjalmer Pedersen
Hjalmer Pedersen